542Phil.464

FIRSTDIVISION

[G.R.NO.126297,January31,2007]

PROFESSIONALSERVICES,INC.,PETITIONER,VS.NATIVIDADANDENRIQUEAGANA,RESPONDENTS.

[G.R.NO.126467]

NATIVIDAD(SUBSTITUTEDBYHERCHILDRENMARCELINOAGANAIII,ENRIQUEAGANA,JR.,EMMA

AGANAANDAYA,JESUSAGANA,ANDRAYMUNDAGANA)ANDENRIQUEAGANA,PETITIONERS,VS.

JUANFUENTES,RESPONDENT.

[G.R.NO.127590]

MIGUELAMPIL,PETITIONER,VS.NATIVIDADAGANAANDENRIQUEAGANA,RESPONDENTS.

DECISION

SANDOVALGUTIERREZ,J.:

Hospitals, having undertaken one of mankinds most important anddelicateendeavors,mustassumethegraveresponsibilityofpursuingitwithappropriatecare.Thecareandservicedispensedthroughthishightrust, however technical, complex and esoteric its character may be,must meet standards of responsibility commensurate with theundertaking to preserve and protect the health, and indeed, the verylivesofthoseplacedinthehospitalskeeping.[1]

Assailedinthesethreeconsolidatedpetitionsforreviewoncertiorari istheCourtofAppealsDecision[2]datedSeptember6,1996 inCAG.R.CVNo.42062andCAG.R.SPNo.32198affirmingwithmodificationtheDecision[3] dated March 17, 1993 of the Regional Trial Court (RTC),Branch 96, Quezon City in Civil Case No. Q43322 and nullifying itsOrderdatedSeptember21,1993.

Thefacts,asculledfromtherecords,are:

On April 4, 1984, Natividad Agana was rushed to the Medical CityGeneral Hospital (Medical City Hospital) because of difficulty of bowelmovement and bloody anal discharge. After a series of medicalexaminations, Dr. Miguel Ampil, petitioner in G.R. No. 127590,diagnosedhertobesufferingfromcancerofthesigmoid.

On April 11, 1984, Dr. Ampil, assisted by the medical staff[4] of theMedical City Hospital, performed an anterior resection surgery onNatividad. He found that the malignancy in her sigmoid area hadspreadonherleftovary,necessitatingtheremovalofcertainportionsofit. Thus, Dr. Ampil obtained the consent of Natividads husband,Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R. No.126467,toperformhysterectomyonher.

AfterDr.Fuenteshadcompletedthehysterectomy,Dr.Ampiltookover,completedtheoperationandclosedtheincision.

However, the operation appeared to be flawed. In the correspondingRecordofOperationdatedApril11,1984,theattendingnursesenteredtheseremarks:

spongecountlacking2announced tosurgeonsearched(sic)donebut tonoavailcontinueforclosure.

On April 24, 1984, Natividad was released from the hospital. Herhospital and medical bills, including the doctors fees, amounted toP60,000.00.

Afteracoupleofdays,Natividadcomplainedofexcruciatingpaininheranal region. She consulted both Dr. Ampil and Dr. Fuentes about it.Theytoldherthatthepainwasthenaturalconsequenceofthesurgery.Dr.Ampilthenrecommendedthatsheconsultanoncologisttoexaminethecancerousnodeswhichwerenotremovedduringtheoperation.

OnMay9,1984,Natividad,accompaniedbyherhusband,wenttotheUnited States to seek further treatment. After four months ofconsultationsand laboratoryexaminations,Natividadwas toldshewasfreeofcancer.Hence,shewasadvisedtoreturntothePhilippines.

On August 31, 1984, Natividad flew back to the Philippines, stillsufferingfrompains.Twoweeksthereafter,herdaughterfoundapieceofgauzeprotrudingfromhervagina.Uponbeinginformedaboutit,Dr.Ampilproceededtoherhousewherehemanagedtoextractbyhandapieceofgauzemeasuring1.5inchesinwidth.Hethenassuredherthatthepainswouldsoonvanish.

Dr.Ampilsassurancedidnotcometrue.Instead,thepainsintensified,prompting Natividad to seek treatment at the Polymedic GeneralHospital. While confined there, Dr. Ramon Gutierrez detected thepresenceofanotherforeignobjectinhervaginaafoulsmellinggauzemeasuring1.5inchesinwidthwhichbadlyinfectedhervaginalvault.Arectovaginalfistulahadformedinherreproductiveorganswhichforcedstool to excrete through the vagina. Another surgical operation wasneeded to remedy the damage. Thus, in October 1984, Natividadunderwentanothersurgery.

OnNovember12,1984,NatividadandherhusbandfiledwiththeRTC,Branch 96, Quezon City a complaint for damages against theProfessionalServices,Inc.(PSI),owneroftheMedicalCityHospital,Dr.Ampil, and Dr. Fuentes, docketed as Civil Case No. Q43322. TheyallegedthatthelatterareliablefornegligenceforleavingtwopiecesofgauzeinsideNatividadsbodyandmalpracticeforconcealingtheiractsofnegligence.

Meanwhile, Enrique Agana also filed with the Professional RegulationCommission(PRC)anadministrativecomplaintforgrossnegligenceandmalpractice against Dr. Ampil and Dr. Fuentes, docketed asAdministrative Case No. 1690. The PRC Board of Medicine heard thecase only with respect to Dr. Fuentes because it failed to acquirejurisdictionoverDr.AmpilwhowasthenintheUnitedStates.

On February 16, 1986, pending the outcome of the above cases,Natividaddiedandwasdulysubstitutedbyherabovenamedchildren(theAganas).

On March 17, 1993, the RTC rendered its Decision in favor of theAganas,findingPSI,Dr.AmpilandDr.Fuentesliablefornegligenceandmalpractice,thedecretalpartofwhichreads:

WHEREFORE,judgmentisherebyrenderedfortheplaintiffsorderingthedefendantsPROFESSIONALSERVICES,INC.,

DR.MIGUELAMPILandDR.JUANFUENTEStopaytotheplaintiffs,jointlyandseverally,exceptinrespectoftheawardfor exemplary damages and the interest thereonwhich arethe liabilitiesofdefendantsDr.Ampil andDr. Fuentesonly,asfollows:

1. Asactualdamages,thefollowingamounts:

a. Theequivalent inPhilippineCurrencyof the totalof US$19,900.00 at the rate of P21.60US$1.00,as reimbursement of actual expenses incurred intheUnitedStatesofAmerica

b. ThesumofP4,800.00astraveltaxesofplaintiffsandtheirphysiciandaughter

c. The total sum of P45,802.50, representing thecost of hospitalization at Polymedic Hospital,medicalfees,andcostofthesalinesolution

2. 2.Asmoraldamages,thesumofP2,000,000.00

3. Asexemplarydamages,thesumofP300,000.00

4. Asattorneysfees,thesumofP250,000.00

5. Legal interest on items 1 (a), (b), and (c) 2 and 3hereinabove, fromdateof filingof thecomplaintuntilfullpaymentand

6. Costsofsuit.

SOORDERED.

Aggrieved,PSI,Dr.FuentesandDr.Ampil interposedanappealtotheCourtofAppeals,docketedasCAG.R.CVNo.42062.Incidentally,onApril3,1993, theAganas filedwith theRTCamotionfor a partial execution of itsDecision,whichwas granted in anOrderdated May 11, 1993. Thereafter, the sheriff levied upon certainpropertiesofDr.AmpilandsoldthemforP451,275.00anddeliveredtheamounttotheAganas.

Following their receipt of the money, the Aganas entered into an

agreementwithPSIandDr.Fuentestoindefinitelysuspendanyfurtherexecution of the RTC Decision. However, not long thereafter, theAganas again filed amotion for analias writ of execution against thepropertiesofPSIandDr.Fuentes.OnSeptember21,1993,theRTCgranted themotion and issued the corresponding writ, prompting Dr.Fuentes to file with the Court of Appeals a petition for certiorari andprohibition,withprayerforpreliminaryinjunction,docketedasCAG.R.SP No. 32198. During its pendency, the Court of Appeals issued aResolution[5] datedOctober 29, 1993grantingDr. Fuentes prayer forinjunctiverelief.

OnJanuary24,1994,CAG.R.SPNo.32198wasconsolidatedwithCAG.R.CVNo.42062.

Meanwhile, on January23,1995, thePRCBoardofMedicine renderedits Decision[6] in Administrative Case No. 1690 dismissing the caseagainstDr.Fuentes.TheBoardheldthattheprosecutionfailedtoshowthatDr. Fuenteswas the onewho left the twopieces of gauze insideNatividadsbodyandthatheconcealedsuchfactfromNatividad.

On September 6, 1996, the Court of Appeals rendered its DecisionjointlydisposingofCAG.R.CVNo.42062andCAG.R.SPNo.32198,thus:

WHEREFORE, except for the modification that the caseagainst defendantappellant Dr. Juan Fuentes is herebyDISMISSED, and with the pronouncement that defendantappellantDr.MiguelAmpil is liable to reimbursedefendantappellant Professional Services, Inc., whatever amountthelatterwillpayorhadpaidtotheplaintiffsappellees,thedecisionappealedfromisherebyAFFIRMEDandtheinstantappealDISMISSED.

Concomitant with the above, the petition for certiorari andprohibition filed by herein defendantappellant Dr. JuanFuentes inCAG.R.SPNo. 32198 is herebyGRANTEDandthe challenged order of the respondent judge datedSeptember 21, 1993, aswell as the aliaswrit of executionissued pursuant thereto are hereby NULLIFIED and SETASIDE.Thebondpostedbythepetitionerinconnectionwiththe writ of preliminary injunction issued by this Court onNovember29,1993isherebycancelled.

Costs against defendantsappellantsDr.MiguelAmpil andProfessionalServices,Inc.

SOORDERED.

OnlyDr.Ampilfiledamotionforreconsideration,butitwasdeniedinaResolution[7]datedDecember19,1996.

Hence,theinstantconsolidatedpetitions.

InG.R.No.126297,PSIallegedinitspetitionthattheCourtofAppealserred inholding that:(1) it is estopped from raising thedefense thatDr.Ampil isnot itsemployee(2) it issolidarily liablewithDr.Ampiland(3) it is not entitled to its counterclaimagainst theAganas. PSIcontends thatDr.Ampil isnot itsemployee,butamereconsultantorindependent contractor. As such, he alone should answer for hisnegligence.

InG.R. No. 126467, the Aganas maintain that the Court of Appealserred in finding thatDr.Fuentes isnotguiltyofnegligenceormedicalmalpractice, invoking the doctrine of res ipsa loquitur. They contendthat the pieces of gauze are prima facie proofs that the operatingsurgeonshavebeennegligent.

Finally,inG.R.No.127590,Dr.AmpilassertsthattheCourtofAppealserredinfindinghimliablefornegligenceandmalpracticesansevidencethatheleftthetwopiecesofgauzeinNatividadsvagina.Hepointedto other probable causes, such as: (1) it was Dr. Fuentes who usedgauzes in performing the hysterectomy (2) the attending nursesfailure toproperlycount thegauzesusedduringsurgeryand(3) themedicalinterventionoftheAmericandoctorswhoexaminedNatividadintheUnitedStatesofAmerica.

Forourresolutionarethesethreevital issues:first,whethertheCourtof Appeals erred in holding Dr. Ampil liable for negligence andmalpracticesecond, whether the Court of Appeals erred in absolvingDr. Fuentes of any liability and third, whether PSI may be heldsolidarilyliableforthenegligenceofDr.Ampil.

IG.R.No.127590WhethertheCourtofAppealsErredinHoldingDr.Ampil

LiableforNegligenceandMalpractice.

Dr.Ampil,inanattempttoabsolvehimself,gearstheCourtsattentiontootherpossible causesofNatividadsdetriment. Heargues that theCourtshouldnotdiscounteitherof the followingpossibilities: first,Dr.Fuentes left the gauzes in Natividads body after performinghysterectomy second, the attending nurses erred in counting thegauzesandthird,theAmericandoctorsweretheoneswhoplacedthegauzesinNatividadsbody.

Dr.Ampilsargumentsarepurelyconjecturalandwithoutbasis.RecordsshowthathedidnotpresentanyevidencetoprovethattheAmericandoctorswere theoneswhoputor left thegauzes inNatividadsbody.Neitherdidhesubmitevidencetorebutthecorrectnessoftherecordofoperation, particularly the number of gauzes used. As to the allegednegligenceofDr.Fuentes,wearemindfulthatDr.Ampilexaminedhis(Dr.Fuentes)workandfounditinorder.

Theglaringtruthisthatallthemajorcircumstances,takentogether,asspecified by the Court of Appeals, directly point to Dr. Ampil as thenegligentparty,thus:

First, it is not disputed that the surgeons used gauzes assponges to control the bleeding of the patient during thesurgicaloperation.

Second, immediately after the operation, the nurses whoassistedinthesurgerynotedintheirreportthatthespongecount (was) lacking 2 that such anomaly wasannounced to surgeon and that a search was donebut to no avail prompting Dr. Ampil to continue forclosurexxx.

Third, after the operation, two (2) gauzes were extractedfrom the same spot of the body of Mrs. Agana where thesurgerywasperformed.

An operation requiring the placing of sponges in the incision is notcompleteuntilthespongesareproperlyremoved,anditissettledthatthe leavingof spongesorother foreignsubstances in thewoundafterthe incisionhasbeenclosed isat least prima facienegligenceby theoperating surgeon.[8] To put it simply, such act is considered soinconsistentwithduecareastoraiseaninferenceofnegligence.There

areevenlegionsofauthoritiestotheeffectthatsuchactisnegligenceperse.[9]

Ofcourse,theCourtisnotblindtotherealitythattherearetimeswhendanger to a patients life precludes a surgeon from further searchingmissingspongesorforeignobjectsleftinthebody.Butthisdoesnotleavehimfreefromanyobligation.Evenifithasbeenshownthatasurgeonwas requiredby theurgentnecessitiesof thecase to leaveasponge in his patients abdomen, because of the dangers attendantupondelay,still,itishislegaldutytosoinformhispatientwithina reasonable time thereafter by advising her of what he hadbeen compelled to do. This is in order that shemight seek relieffromtheeffectsof the foreignobject left inherbodyasherconditionmightpermit.TherulinginSmithv.Zeagler[10]isexplicit,thus:

The removal of all sponges used is part of a surgicaloperation,andwhenaphysicianorsurgeonfailstoremoveasponge he has placed in his patients body that should beremoved as part of the operation, he thereby leaves hisoperationuncompletedandcreatesanewconditionwhichimposes upon him the legal duty of calling the newcondition to his patients attention, and endeavoringwiththemeanshehasathandtominimizeandavoiduntowardresultslikelytoensuetherefrom.

Here,Dr.AmpildidnotinformNatividadaboutthemissingtwopiecesofgauze. Worse, he even misled her that the pain she wasexperiencing was the ordinary consequence of her operation.Hadhebeenmorecandid,Natividadcouldhave taken the immediateandappropriatemedicalremedytoremovethegauzesfromherbody.Toourmind,whatwas initiallyanactofnegligencebyDr.Ampilhasripenedintoadeliberatewrongfulactofdeceivinghispatient.

This is a clear case of medical malpractice or more appropriately,medicalnegligence.Tosuccessfullypursue thiskindof case,apatientmust only prove that a health care provider either failed to dosomethingwhichareasonablyprudenthealthcareproviderwouldhavedone, or that he did something that a reasonably prudent providerwould not have done and that failure or action caused injury to thepatient.[11] Simply put, the elements areduty, breach, injury andproximatecausation.Dr,Ampil,astheleadsurgeon,hadthedutytoremoveallforeignobjects,suchasgauzes,fromNatividadsbodybefore

closure of the incision. When he failed to do so, it was his duty toinformNatividadaboutit.Dr.Ampilbreachedbothduties.Suchbreachcaused injury to Natividad, necessitating her further examination byAmericandoctorsandanothersurgery. ThatDr.Ampilsnegligence istheproximatecause[12] of Natividads injury could be traced fromhisactof closing the incisiondespite the informationgivenby theattending nurses that two pieces of gauze were still missing.That theywere later on extracted fromNatividads vagina establishedthecausallinkbetweenDr.Ampilsnegligenceandtheinjury.Andwhatfurther aggravated such injury was his deliberate concealment of themissinggauzesfromtheknowledgeofNatividadandherfamily.

IIG.R.No.126467WhethertheCourtofAppealsErredinAbsolving

Dr.FuentesofanyLiability

TheAganasassailedthedismissalbythetrialcourtofthecaseagainstDr.Fuentesonthegroundthatitiscontrarytothedoctrineofresipsaloquitur.Accordingtothem,thefactthatthetwopiecesofgauzewereleft inside Natividads body is a prima facie evidence of Dr. Fuentesnegligence.

Wearenotconvinced.

Literally,resipsaloquiturmeansthethingspeaksforitself.It istherule that the fact of the occurrence of an injury, taken with thesurrounding circumstances, may permit an inference or raise apresumption of negligence, ormake out a plaintiffsprima facie case,and present a question of fact for defendant to meet with anexplanation.[13] Stated differently,where the thingwhich caused theinjury,withoutthefaultoftheinjured,isundertheexclusivecontrolofthedefendantandtheinjuryissuchthatitshouldnothaveoccurredifhe, having such control used proper care, it affords reasonableevidence,intheabsenceofexplanationthattheinjuryarosefromthedefendantswantof care,and theburdenofproof is shifted tohim toestablishthathehasobservedduecareanddiligence.[14]

From the foregoing statements of the rule, the requisites for theapplicabilityofthedoctrineofresipsaloquiturare:(1)theoccurrenceof an injury (2) the thing which caused the injury was under thecontrolandmanagementofthedefendant(3)theoccurrencewassuchthatintheordinarycourseofthings,wouldnothavehappenedifthose

whohadcontrolormanagementusedpropercareand(4)theabsenceofexplanationby thedefendant.Of the foregoing requisites, themostinstrumental is the control andmanagement of the thingwhichcausedtheinjury.[15]

We find the element of control andmanagement of the thing whichcausedtheinjurytobewanting.Hence,thedoctrineofresipsaloquiturwillnotlie.

ItwasdulyestablishedthatDr.AmpilwastheleadsurgeonduringtheoperationofNatividad.HerequestedtheassistanceofDr.Fuentesonlytoperformhysterectomywhenhe(Dr.Ampil)foundthatthemalignancyinhersigmoidareahadspreadtoherleftovary.Dr.FuentesperformedthesurgeryandthereafterreportedandshowedhisworktoDr.Ampil.The latter examined it and finding everything to be in order,allowedDr.Fuentes to leave theoperating room.Dr.Ampil thenresumedoperatingonNatividad.Hewasabouttofinishtheprocedurewhentheattendingnursesinformedhimthattwopiecesofgauzeweremissing. A diligent searchwas conducted, but themisplaced gauzeswere not found. Dr. Ampil then directed that the incision beclosed. During this entire period, Dr. Fuentes was no longer in theoperatingroomandhad,infact,leftthehospital.

Under the Captain of the Ship rule, the operating surgeon is theperson in complete charge of the surgery room and all personnelconnectedwiththeoperation.Theirdutyistoobeyhisorders.[16]Asstatedbefore,Dr.Ampilwastheleadsurgeon. Inotherwords,hewastheCaptainoftheShip.Thathedischargedsuchroleisevidentfrom his following conduct: (1) calling Dr. Fuentes to perform ahysterectomy(2)examiningtheworkofDr.Fuentesandfinding it inorder(3)grantingDr.Fuentespermissiontoleaveand(4)orderingtheclosureoftheincision.Toourmind,itwasthisactoforderingthe closure of the incision notwithstanding that two pieces ofgauze remained unaccounted for, that caused injury toNatividadsbody. Clearly, the control andmanagement of the thingwhichcausedtheinjurywasinthehandsofDr.Ampil,notDr.Fuentes.

In this jurisdiction, res ipsa loquitur is not a rule of substantive law,hence,doesnotpersecreateorconstituteanindependentorseparategroundof liability, beingamere evidentiary rule.[17] In otherwords,mere invocationandapplicationofthedoctrinedoesnotdispensewiththe requirement of proof of negligence. Here, the negligence was

proventohavebeencommittedbyDr.AmpilandnotbyDr.Fuentes.

IIIG.R.No.126297WhetherPSIIsLiablefortheNegligenceofDr.Ampil

Thethird issuenecessitatesaglimpseat thehistoricaldevelopmentofhospitals and the resulting theories concerning their liability for thenegligenceofphysicians.

Until the midnineteenth century, hospitals were generally charitableinstitutions,providingmedicalservicestothelowestclassesofsociety,withoutregardforapatientsabilitytopay.[18]Thosewhocouldaffordmedical treatmentwere usually treated at home by their doctors.[19]However,thedaysofhousecallsandphilanthropichealthcareareover. Themodernhealthcare industrycontinues todistance itself from itscharitablepastandhasexperiencedasignificantconversionfromanotforprofit health care to forprofit hospital businesses. Consequently,significantchangesinhealthlawhaveaccompaniedthebusinessrelatedchanges in the hospital industry. One important legal change is anincrease inhospital liability formedicalmalpractice. Manycourtsnowallow claims for hospital vicarious liability under the theories ofrespondeatsuperior,apparentauthority,ostensibleauthority,oragencybyestoppel.[20]

In this jurisdiction, the statute governing liability for negligent acts isArticle2176oftheCivilCode,whichreads:

Art.2176.Whoever by act or omission causes damage toanother,therebeingfaultornegligence,isobligedtopayforthedamagedone.Suchfaultornegligence,ifthereisnopreexistingcontractual relationbetween theparties, is calledaquasidelict and is governed by the provisions of thisChapter.

AderivativeofthisprovisionisArticle2180,therulegoverningvicariousliabilityunderthedoctrineofrespondeatsuperior,thus:

ART. 2180. The obligation imposed by Article 2176 isdemandable not only for ones own acts or omissions, butalsoforthoseofpersonsforwhomoneisresponsible.

xxxxxx

Theownersandmanagersofanestablishmentorenterpriseare likewise responsible for damages caused by theiremployeesintheserviceofthebranchesinwhichthelatterareemployedorontheoccasionoftheirfunctions.

Employers shall be liable for the damages caused by theiremployeesandhouseholdhelpersactingwithinthescopeoftheirassignedtaskseventhoughtheformerarenotengagedinanybusinessorindustry.

xxxxxx

The responsibility treatedof in thisarticle shall ceasewhenthe persons hereinmentioned prove that they observed allthediligenceofagoodfatherofafamilytopreventdamage.

A prominent civilist commented that professionals engaged by anemployer, such as physicians, dentists, and pharmacists, are notemployees under this article because the manner in which theyperformtheirworkisnotwithinthecontrolofthelatter(employer).Inother words, professionals are considered personally liable forthe fault or negligence they commit in the discharge of theirduties,andtheiremployercannotbeheldliableforsuchfaultornegligence.Inthecontextofthepresentcase,ahospitalcannotbeheld liable for the fault ornegligenceofaphysicianor surgeon in thetreatmentoroperationofpatients.[21]

The foregoing view is grounded on the traditional notion that theprofessional status and the very nature of the physicians callingprecludehimfrombeingclassedasanagentoremployeeofahospital,wheneverheactsinaprofessionalcapacity.[22]Ithasbeensaidthatmedical practice strictly involves highly developed and specializedknowledge,[23]suchthatphysiciansaregenerallyfreetoexercisetheirown skill and judgment in rendering medical services sansinterference.[24] Hence, when a doctor practices medicine in ahospitalsetting,thehospitalanditsemployeesaredeemedtosubservehim in hisministrations to the patient and his actions are of his ownresponsibility.[25]

ThecaseofSchloendorffv.SocietyofNewYorkHospital[26] wasthen

considered an authority for this view. The Schloendorff doctrineregardsaphysician,evenifemployedbyahospital,asanindependentcontractor because of the skill he exercises and the lack of controlexertedoverhiswork.Underthisdoctrine,hospitalsareexemptfromthe application of the respondeat superior principle for fault ornegligencecommittedbyphysiciansinthedischargeoftheirprofession.

However,theefficacyoftheforegoingdoctrinehasweakenedwiththesignificant developments inmedical care. Courts came to realize thatmodern hospitals are increasingly taking active role in supplying andregulating medical care to patients. No longer were a hospitalsfunctions limited to furnishing room, food, facilities for treatment andoperation,andattendantsforitspatients.Thus,inBingv.Thunig,[27]theNewYorkCourtofAppealsdeviatedfromtheSchloendorffdoctrine,notingthatmodernhospitalsactuallydofarmorethanprovidefacilitiesfor treatment. Rather, they regularly employ, on a salaried basis, alarge staff of physicians, interns, nurses, administrative and manualworkers. They charge patients for medical care and treatment, evencollectingforsuchservicesthroughlegalaction,ifnecessary.Thecourtthen concluded that there is no reason to exempt hospitals from theuniversalruleofrespondeatsuperior.

Inourshores, thenatureof the relationshipbetween thehospitalandthe physicians is rendered inconsequential in view of our categoricalpronouncement inRamos v. Court of Appeals[28] that for purposes ofapportioning responsibility inmedicalnegligencecases,anemployeremployee relationship in effect exists between hospitals andtheirattendingandvisitingphysicians.ThisCourtheld:

We now discuss the responsibility of the hospital in thisparticular incident. The unique practice (among privatehospitals) of filling up specialist staff with attending andvisiting consultants, who are allegedly not hospitalemployees, presents problems in apportioning responsibilityfor negligence in medical malpractice cases. However, thedifficultyismoreapparentthanreal.

Inthefirstplace,hospitalsexercisesignificantcontrolin the hiring and firing of consultants and in theconduct of their work within the hospital premises.Doctors who apply for consultant slots, visiting orattending,are required to submitproofof completion

of residency, their educational qualifications,generally,evidenceofaccreditationbytheappropriateboard (diplomate), evidence of fellowship in mostcases, and references. These requirements arecarefully scrutinized by members of the hospitaladministrationorbyareviewcommitteesetupbythehospital who either accept or reject the application.xxx.

After a physician is accepted, either as a visiting orattendingconsultant,heisnormallyrequiredtoattendclinicopathological conferences, conduct bedsiderounds for clerks, interns and residents, moderategrand rounds and patient audits and perform othertasks and responsibilities, for the privilege of beingabletomaintainaclinicinthehospital,and/orfortheprivilege of admitting patients into the hospital. Inadditiontothese,thephysiciansperformanceasaspecialistis generally evaluated by a peer review committee on thebasisofmortalityandmorbiditystatistics,andfeedbackfrompatients, nurses, interns and residents. A consultantremissinhisduties,oraconsultantwhoregularlyfallsshort of the minimum standards acceptable to thehospital or its peer review committee, is normallypolitelyterminated.

In other words, private hospitals, hire, fire andexercise real control over their attendingandvisitingconsultant staff. While consultants are not,technicallyemployees, x x x, thecontrolexercised,the hiring, and the right to terminate consultants allfulfill the important hallmarks of an employeremployee relationship, with the exception of thepayment of wages. In assessing whether such arelationship in fact exists, the control test is determining.Accordingly,onthebasisoftheforegoing,werulethatforthe purpose of allocating responsibility in medicalnegligence cases, an employeremployee relationshipineffectexistsbetweenhospitalsand theirattendingandvisitingphysicians.

ButtheRamospronouncementisnotouronlybasisinsustainingPSIs

liability. Its liability is also anchored upon the agency principle ofapparent authority or agency by estoppel and the doctrine ofcorporate negligence which have gained acceptance in thedetermination of a hospitals liability for negligent acts of healthprofessionals.Thepresentcaseservesasaperfectplatformtotesttheapplicabilityofthesedoctrines,thus,enrichingourjurisprudence.

Apparentauthority,orwhat is sometimes referred toas theholdingout theory, or doctrine of ostensible agency or agency byestoppel,[29]hasitsoriginfromthelawofagency.Itimposesliability,notastheresultof therealityofacontractualrelationship,butratherbecause of the actions of a principal or an employer in somehowmisleadingthepublicintobelievingthattherelationshiportheauthorityexists.[30] The concept is essentially one of estoppel and has beenexplainedinthismanner:

The principal is bound by the acts of his agent with theapparentauthoritywhichheknowinglypermitstheagenttoassume, or which he holds the agent out to the public aspossessing. The question in every case is whether theprincipalhasbyhisvoluntaryactplacedtheagentinsuchasituationthatapersonofordinaryprudence,conversantwithbusinessusagesandthenatureoftheparticularbusiness,isjustified in presuming that such agent has authority toperformtheparticularactinquestion.[31]

TheapplicabilityofapparentauthorityinthefieldofhospitalliabilitywasupheldlongtimeagoinIrvingv.DoctorHospitalofLakeWorth,Inc.[32]There,itwasexplicitlystatedthattheredoesnotappeartobeanyrational basis for excluding the concept of apparent authorityfromthefieldofhospitalliability. Thus, incaseswhere itcanbeshownthatahospital,byitsactions,hasheldoutaparticularphysicianasitsagentand/oremployeeandthatapatienthasacceptedtreatmentfromthatphysicianinthereasonablebeliefthatitisbeingrenderedinbehalfofthehospital,thenthehospitalwillbeliableforthephysiciansnegligence.

Our jurisdiction recognizes the concept of an agencyby implication orestoppel.Article1869oftheCivilCodereads:

ART. 1869. Agency may be express, or implied from the

actsoftheprincipal,fromhissilenceorlackofaction,orhisfailuretorepudiatetheagency,knowingthatanotherpersonisactingonhisbehalfwithoutauthority.

In this case, PSI publicly displays in the lobby of the Medical CityHospital thenames and specializations of the physicians associated oraccredited by it, including those of Dr. Ampil and Dr. Fuentes. WeconcurwiththeCourtofAppealsconclusionthatitisnowestoppedfrom passing all the blame to the physicians whose names itproudly paraded in the public directory leading the public tobelievethatitvouchedfortheirskillandcompetence.Indeed,PSIs act is tantamount to holding out to the public that Medical CityHospital,throughitsaccreditedphysicians,offersqualityhealthcareservices. By accrediting Dr. Ampil and Dr. Fuentes and publiclyadvertisingtheirqualifications,thehospitalcreatedtheimpressionthattheywereitsagents,authorizedtoperformmedicalorsurgicalservicesfor its patients. As expected, these patients, Natividad being one ofthem, accepted the services on the reasonable belief that such werebeing rendered by the hospital or its employees, agents, or servants.Thetrialcourtcorrectlypointedout:

xxx regardlessof theeducationandstatus in lifeofthepatient,heoughtnotbeburdenedwiththedefenseofabsenceofemployeremployeerelationshipbetweenthe hospital and the independent physician whosename and competence are certainly certified to thegeneralpublicby thehospitalsactof listinghimandhis specialty in its lobby directory, as in the caseherein. The high costs of todays medical and healthcare should at least exact on the hospital greater, ifnot broader, legal responsibility for the conduct oftreatment and surgery within its facility by itsaccreditedphysicianorsurgeon,regardlessofwhetherheisindependentoremployed.[33]

Thewisdomoftheforegoingratiocinationiseasytodiscern.Corporateentities, likePSI, are capableof actingonly throughother individuals,suchasphysicians.Iftheseaccreditedphysiciansdotheirjobwell,thehospitalsucceedsinitsmissionofofferingqualitymedicalservicesandthusprofitsfinancially. Logically,wherenegligencemarsthequalityofitsservices,thehospitalshouldnotbeallowedtoescapeliabilityfortheactsofitsostensibleagents.

Wenowproceedtothedoctrineofcorporatenegligenceorcorporateresponsibility.

OneallegationinthecomplaintinCivilCaseNo.Q43332fornegligenceandmalpracticeisthatPSIasowner,operatorandmanagerofMedicalCity Hospital, did not perform the necessary supervision norexercise diligent efforts in the supervision of Drs. Ampil andFuentes and its nursing staff, resident doctors, and medicalinternswhoassistedDrs.AmpilandFuentesintheperformanceof their duties as surgeons.[34] Premised on the doctrine ofcorporatenegligence,thetrialcourtheldthatPSIisdirectlyliable forsuchbreachofduty.

Weagreewiththetrialcourt.

Recent years have seen the doctrine of corporate negligence as thejudicial answer to the problem of allocating hospitals liability for thenegligent acts of health practitioners, absent facts to support theapplicationofrespondeatsuperiororapparentauthority.Itsformulationproceeds from the judiciarys acknowledgment that in these moderntimes,thedutyofprovidingqualitymedicalserviceisnolongerthesoleprerogative and responsibility of the physician. The modern hospitalshave changed structure. Hospitals now tend to organize a highlyprofessionalmedicalstaffwhosecompetenceandperformanceneedtobe monitored by the hospitals commensurate with their inherentresponsibilitytoprovidequalitymedicalcare.[35]

The doctrine has its genesis in Darling v. Charleston CommunityHospital.[36] There, the Supreme Court of Illinois held that the jurycould have found a hospital negligent, inter alia, in failing tohaveasufficientnumberoftrainednursesattendingthepatientfailingtorequireaconsultationwithorexaminationbymembersof the hospital staff and failing to review the treatmentrenderedtothepatient.OnthebasisofDarling,otherjurisdictionsheldthatahospitalscorporatenegligenceextendstopermittingaphysicianknowntobeincompetenttopracticeatthehospital.[37] With the passage of time, more duties were expected fromhospitals, among them: (1) the use of reasonable care in themaintenance of safe and adequate facilities and equipment (2) theselection and retention of competent physicians (3) theoverseeingor supervisionof all personswhopracticemedicine

withinitswallsand(4)theformulation,adoptionandenforcementofadequaterulesandpoliciesthatensurequalitycareforitspatients.[38]

Thus,inTucsonMedicalCenter,Inc.v.Misevich,[39]itwasheldthatahospital,followingthedoctrineofcorporateresponsibility,hasthedutyto see that it meets the standards of responsibilities for the care ofpatients. Such duty includes the proper supervision of themembers of its medical staff. And in Bost v. Riley,[40] the courtconcluded that a patient who enters a hospital does so with thereasonable expectation that itwill attempt to cure him.Thehospitalaccordinglyhasthedutytomakeareasonableefforttomonitorand oversee the treatment prescribed and administered by thephysicianspracticinginitspremises.

In the present case, it was duly established that PSI operates theMedicalCityHospitalforthepurposeandundertheconceptofprovidingcomprehensive medical services to the public. Accordingly, it has thedutytoexercisereasonablecaretoprotectfromharmallpatientsadmittedintoitsfacilityformedicaltreatment.Unfortunately,PSIfailed to perform such duty. The findings of the trial court areconvincing,thus:

x x x PSIs liability is traceable to its failure to conduct aninvestigationof thematterreported in thenotabeneof thecount nurse. Such failure established PSIs part in the darkconspiracy of silence and concealment about the gauzes.Ethical considerations, if notalso legal,dictated theholdingofanimmediateinquiryintotheevents,ifnotforthebenefitof the patient towhom the duty is primarily owed, then intheinterestofarrivingatthetruth.TheCourtcannotacceptthat themedical and the healing professions, through theirmembers likedefendantsurgeons,andtheir institutions likePSIs hospital facility, can callously turn their backs on anddisregardevenamereprobabilityofmistakeornegligenceby refusing or failing to investigate a report of suchseriousnessastheoneinNatividadscase.

It is worthy to note that Dr. Ampil and Dr. Fuentes operated onNatividad with the assistance of the Medical City Hospitals staff,composed of resident doctors, nurses, and interns. As such, it isreasonable to conclude that PSI, as the operator of the hospital, hasactual or constructive knowledge of the procedures carried out,particularly the report of the attending nurses that the two

piecesofgauzeweremissing.InFridenav.Evans,[41]itwasheldthat a corporation is bound by the knowledge acquired by or noticegiventoitsagentsorofficerswithinthescopeoftheirauthorityandinreferencetoamattertowhichtheirauthorityextends.Thismeansthatthe knowledge of any of the staff of Medical City Hospital constitutesknowledgeofPSI.Now,thefailureofPSI,despitetheattendingnursesreport,toinvestigateandinformNatividadregardingthemissinggauzesamountstocallousnegligence.NotonlydidPSIbreachitsdutiestooverseeorsuperviseallpersonswhopracticemedicinewithinitswalls, it also failed to take an active step in fixing thenegligence committed. This renders PSI, not only vicariously liableforthenegligenceofDr.AmpilunderArticle2180oftheCivilCode,butalso directly liable for its own negligence under Article 2176. InFridena,theSupremeCourtofArizonaheld:

xxxInrecentyears,however,thedutyofcareowedtothepatientbythehospitalhasexpanded.?Theemergingtrendis tohold thehospital responsiblewhere thehospitalhas failed to monitor and review medical servicesbeing provided within its walls. See Kahn HospitalMalpracticePrevention,27DePaul.Rev.23(1977).

AmongthecasesindicativeoftheemergingtrendisPurcellv. Zimbelman, 18 Ariz. App. 75,500 P. 2d 335 (1972). InPurcell,thehospitalarguedthatitcouldnotbeheldliableforthemalpracticeofamedicalpractitionerbecausehewasanindependent contractor within the hospital. The Court ofAppeals pointed out that the hospital had created aprofessionalstaffwhosecompetenceandperformancewas to be monitored and reviewed by the governingbodyofthehospital,andthecourtheldthatahospitalwouldbenegligentwhereithadknowledgeorreasonto believe that a doctor using the facilities wasemploying a method of treatment or care which fellbelowtherecognizedstandardofcare.

Subsequent to thePurcell decision, theArizonaCourtof Appeals held that a hospital has certain inherentresponsibilities regarding the quality of medical carefurnishedtopatientswithinitswallsanditmustmeetthestandardsofresponsibilitycommensuratewiththisundertaking. Beeck v. Tucson General Hospital, 18 Ariz.

App.165,500P.2d1153(1972).Thiscourthasconfirmedthe rulings of the Court of Appeals that a hospital has theduty of supervising the competence of the doctors on itsstaff.xxx.

xxxxxx

In the amended complaint, the plaintiffs did plead that theoperationwasperformedatthehospitalwith itsknowledge,aid, and assistance, and that the negligence of thedefendantswastheproximatecauseofthepatientsinjuries.We find that such general allegations of negligence,along with the evidence produced at the trial of thiscase, are sufficient to support the hospitals liabilitybasedonthetheoryofnegligentsupervision.

Anent the corollary issue of whether PSI is solidarily liable with Dr.Ampilfordamages,letitbeemphasizedthatPSI,apartfromageneraldenial of its responsibility, failed to adduce evidence showing that itexercisedthediligenceofagoodfatherofafamilyintheaccreditationandsupervisionofthelatter.Inneglectingtooffersuchproof,PSIfailedto discharge its burdenunder the last paragraph of Article 2180 citedearlier, and, therefore, must be adjudged solidarily liable with Dr.Ampil. Moreover,aswehavediscussed,PSI isalsodirectly liable totheAganas.

Onefinalword.Onceaphysicianundertakesthetreatmentandcareofapatient,thelawimposesonhimcertainobligations.Inordertoescapeliability, hemustpossess that reasonabledegreeof learning, skill andexperience required by his profession. At the same time, he mustapplyreasonablecareanddiligence intheexerciseofhisskillandtheapplicationofhisknowledge,andexerthisbestjudgment.

WHEREFORE,weDENY all thepetitionsandAFFIRM the challengedDecisionoftheCourtofAppealsinCAG.R.CVNo.42062andCAG.R.SPNo.32198.

CostsagainstpetitionersPSIandDr.MiguelAmpil.

SOORDERED.

ANGELINASANDOVALGUTIERREZ

AssociateJustice

WECONCUR:

PunoC.J.,(Chairperson),Corona,andAzcuna,JJ.,concur.Garcia, J., no part. Ponente of the assailed Decision in the Court ofAppeals.

[1] Beeck v. Tucson General Hospital, 500 P. 2d 1153 (1972), citingDarlingv.CharlestonCommunityMemorialHospital,33Ill.2d326,211N.E.2d253.

[2]PennedbyAssociateJusticeCancioC.Garcia(nowamemberoftheSupreme Court) and concurred in by Associate Justices Eugenio S.Labitoria and Artemio G. Tuquero (both retired), Rollo, G.R. Nos.126297,pp.3651126467,pp.2742127590,pp.2338.

[3] Penned by Judge Lucas P. Bersamin (now Justice of the Court ofAppeals),Rollo,G.R.No.126647,pp.6983.

[4] Themedical staff was composed of physicians, both residents andinterns,aswellasnurses.

[5]Thedispositiveportionreads:

WHEREFORE,letawritofpreliminaryinjunctionbeissueduponpetitioners posting of bond in the amount of P20,000.00,ENJOININGpublicrespondentsfromimplementingthequestionedorder dated September 21, 1993 and from further taking anyactioninCivilCaseNo.Q43322entitled NatividadG.Agana,etal.,plaintiffs,versusProfessionalServices,Inc.,etal.,defendantspendingresolutionoftheinstantpetition.

SOORDERED.SeeRollo,G.R.No.126297,p.42.

[6]RolloofG.R.No.126467,pp.8489.

[7]RolloofG.R.No.127590,p.40.

[8]Rulev.Cheeseman,317P.2d472(1957),citingRusselv.Newman,

116Kan.268P.752Bernsdenv. Johnson, 174Kan. 230, 255P. 2d1033.

[9]Smithv.Zeagler,157So.328Fla. (1934), citingRuthv. Johnson,(C.C.A.)172F.191Reevesv.Lutz,179Mo.App.61,162S.W.280Rayburnv.Day, 126Or.135,268P.1002,59A.L.R.1062Wynne v.Harvey,96Wash.379,165P.67Harrisv.Fall(C.C.A.)177F.79,27L.R.A.(N.S.)1174Moorev. Ivey, (Tex.Civ.App.)264S.W.28321R.C.L.388.

[10]157So.328Fla.(1934)

[11]GarciaRueda v. Pascasio, G.R. No. 118141, September 5, 1997,278SCRA769.

[12] In the leadingcaseofVda.deBataclanv.Medina, (102Phil.181[1957]),thisCourtlaiddownthefollowingdefinitionofproximatecauseinthisjurisdictionasfollows:

[T]hat cause, which, in natural and continuous sequenceunbroken by any efficient intervening cause, produces theinjuryandwithoutwhichtheresultwouldnothaveoccurred. And more comprehensively, the proximate cause is thatactingfirstandproducingtheinjury,eitherimmediatelyorbysettingothereventsinmotion,allconstitutinganaturalandcontinuous chain of events, each having a close causalconnectionwiththeimmediatepredecessor,thefinaleventinthe chain immediately effecting the injury as a natural andprobable result of the causewhich first acted, underwhichcircumstancesthatthepersonresponsibleforthefirsteventshould,asanordinarilyprudentandintelligentperson,havereasonable ground to expect at the moment of his act ordefault thatan injury tosomepersonmightprobably resulttherefrom.

[13]Ramosv.CourtofAppeals,G.R.No.124354,December29,1999,321SCRA584.

[14]Africav.Caltex(Phils.)Inc.,123Phil.280(1966).

[15]Ranos v. Court of Appeals, supra. In Ramos, the phrase used is

control of the instrumentality which caused the damage, citing St.JohnsHospitalandSchoolofNursingv.Chapman,434P2d160(1967).

[16]RuralEducationalAssnv.Bush,42Tenn.App.34,298S.W.2d761(1956).

[17]Ramosv.CourtofAppeals,supraatfootnote13.

[18] Levin, Hospital Vicarious Liability for Negligence by IndependentContractorPhysicians:ANewRuleforNewTimes,October17,2005.

[19]Id.

[20]Id.

[21]Tolentino,TheCivilCodeofthePhilippines,VolumeV,1992Ed.,p.616.

[22]ArkansasM.R.Co. v. Pearson, 98Ark. 442, 153SW595 (1911)Runyanv.Goodrum,147Ark.281,228SW397,13ALR1403(1921)Rosanev.Senger,112Colo.363,149P.2d372(supersededbystatuteonothergrounds)Moonv.MercyHosp.,150Col.430,373P.2d944(1962)Austinv.Litvak,682P.2d41,50ALR4th225(1984)WesternIns.Co.v.Brochner,682P.2d1213(1983)Rodriguezv.Denver,702P.2d1349(1984).

[23]ArkansasM.R. Co. v. Pearson, id. Nieto v. State, 952 P. 2d 834(1997).ButseeBeeckv.TucsonGeneralHosp.,18Ariz.App.165,500P.2d1153(1972)PaintsvilleHosp.Co.,683SW2d255(1985)Kelleyv. Rossi, 395 Mass. 659, 481 NE 2d 1340 (1985) which held that aphysiciansprofessionalstatusdoesnotpreventhimorherfrombeingaservantoragentofthehospital.

[24]Fridenav.Evans,127Ariz.516,522P.2d463(1980).

[25]Kittov.Gilbert,39ColoApp374,570P.2d544(1977).

[26]211N.Y.125,105N.E.92,52L.R.A.,N.S.,505(1914).ThecourtinSchloendorffopined that ahospital doesnot act throughphysiciansbut merely procures them to act on their own initiative and

responsibility. For subsequent application of the doctrine, see forinstance,Hendricksonv.Hodkin,250App.Div649,294NYS982,revdon other grounds, 276 NY 252, 11 NE 2d 899 (1937) Necolayff v.GeneseeHosp.,270App.Div.648,61NYS2d832,affd296NY936,73NE2d 117 (1946) Davie v. Lenox Hill Hosp., Inc., 81 NYS 2d 583(1948)Rothv.BethElHosp.,Inc.,279App.Div917,110NYS2d583(1952)Rufinov.US, 126 F.Supp. 132 (1954)Mrachek v. SunshineBiscuit,Inc.,308NY116,123N.E.2d801(1954).

[27]2NY2d656,163NYS2d3,143N.E.2d3(1957).

[28]Supraatfootnote13.

[29] BLACKS LAW DICTIONARY (6th Ed. 1990) 1100. The termsostensible agency, agency by estoppel, apparent authority, andholdingouttendtobeusedinterchangeablybythecourtstorefertothistheoryofliability.Seeforinstance,Bakerv.Werner,654P2d263(1982)andAdamskiv.TacomaGen.Hosp.,20WashApp.98,579P2d970 (1978). Agency by estoppel is defined as one created byoperationoflawandestablishedbyproofofsuchactsoftheprincipalasreasonably lead thirdpersons to theconclusionof itsexistence.Ariseswhere principal by negligence in failing to supervise agents affairs,allows agent to exercise powers not granted to him, thus justifyingothers inbelieving theagentpossesses requisite authority. BLACK's,supra,p.62.Anostensibleagencyisanimpliedorpresumptiveagencywhich exists where one, either intentionally or from want of ordinarycare,inducesanothertobelievethatathirdpersonishisagent,thoughheneverinfact,employedhim.Itis,strictlyspeaking,noagencyatall,but is in reality based entirely upon estoppel. Apparent authorityrefers to thepower to affect the legal relationsof anotherpersonbytransactions with third persons, professedly as agent for the other,arising fromand inaccordancewiththeothersmanifestationstosuchthirdpersons.Supra,p.96.

[30] Irving v. Doctors Hospital of Lake Worth, Inc., 415 So. 2d 55(1982),quotingArthurv.St.PetersHospital,169N.J.575,405A.2d443(1979).

[31] Id., citingHudsonv.C., LoanAssn., Inc. v.Horowytz, 116N.J.L.605,608,186A437(Sup.Ct.1936).

[32]Supra.

[33]RTCDecision,p.9,RolloofG.R.No.126467,p.127.

[34]RTCDecision,p.2,RolloofG.R.No.126467,p.120.

[35]Purcellv.Zimbelman,18Ariz.App.75,500P2d335(1972).

[36]Supraatfootnote1.

[37]Corletov.Hospital,138N.J.Super.302,350A.2d534(Super.Ct.LawDiv.1975)Purcellv.Zimbelman, 18Ariz.App. 75,500P. 2d335(1972) Hospital Authority v. Joiner, 229 Ga. 140,189 S.E. 2d 412(1972).

[38]Welshv.Bulger,548Pa.504,698A.2d581(1997).

[39]115Ariz.34,545P2d958(1976).

[40]262S.E.2d391,certdenied300NC194,269S.E.2d621(1980).

[41]127Ariz.516,622P.2d463(1980).

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